Govt not for changing land-use to let ArcelorMittal set up a solar park

BENGALURU: The Karnataka government faces a serious dilemma: whether to take back 7,500 acres allotted to ArcelorMittal, the world's largest steel maker, and Miglani family-owned Uttam Galva Steel in Ballari district to set up steel plants or allow them to use the land for alternative purposes.

"If we take back the land, it may send a wrong signal to investors. If we don't, the land may be used for setting up solar plants, which will not generate employment as a steel or any other heavy industry will,'' additional chief secretary (commerce and industries) K Ratna Prabha told reporters here on Monday.

Prabha said she had written to ArcelorMittal and Uttam Galva Steel asking them to take steps to set up their plants but they replied saying they had dropped the plans owing to sluggishness in the steel sector and requested the state to allow the land to be used for alternative purposes.

She said the department was not in favour of giving the land for setting up a solar plant because it does not generate enough employment. "We want some heavy industry to come up on the land since Ballari is a potential centre for heavy industries and it will help the state in terms of investment and employment as well," Prabha added.

Expressing a similar view, industries minister RV Deshpande said, "We are yet to take a call on the company's proposal."

Prabha said chief minister Siddaramaiah has to take the final decision. According to the state policy, the government can take back the land if investors fail to set up shop within 7-10 years.

ArcelorMittal had signed the MoU for setting up a six million tonne steel project at the Global Investors meet held in Bengaluru in June 2010 during the BJP regime. This MoU was touted as a significant investment achievement. In 2013, Uttam Galva Steel had bought Brahmani Steel, started by mining baron K Janardhana Reddy who wanted to set up a seven million tonne steel plant in the state.

The steel giants have cited the bad phase the steel sector is passing through, and the regulatory environment for their decisions, and asked for an order from the government permitting change in land use.